Canada's business magazine for traditional natural health retailers

Community Natural Foods celebrates 40 years

community naturals storeCalgary’s Community Natural Foods (CNF) received a nice early birthday surprise at CHFA West in April.  On the verge of marking its 40th anniversary, Community took home the Brock Elliott Memorial Award for Excellence in Retailing at the CHFA awards ceremony.

 Calgary’s Community Natural Foods (CNF) received a nice early birthday surprise at CHFA West in April.  On the verge of marking its 40th anniversary, Community took home the Brock Elliott Memorial Award for Excellence in Retailing at the CHFA awards ceremony.

Industry insiders – the ones who travel the country visiting all the best health food stores – weren’t surprised: they have always held Community Natural Foods in very high regard.  Since it’s earliest days, Community has always been a leader, one of the bigger, more progressive retailers, known for it’s vast selection of supplements, produce, HABA and grocery items and its always-popular in-store restaurant and café.

However, it is many of the things the store has done lately  – some focused on the sales floor, others behind the scenes – that has enabled Community to elevate it’s game to meet the growing demands of its customer base, while preparing itself to go head-to-head with it’s competition, including the “big boys” from the mass side.

Back in 1977, when brothers Garry and Peter Wilkes founded Community Naturals, they didn’t have concerns like competition or “the mass.”   Their only goal was to make sure that healthy and natural foods were available to everyone.

“Better options”

CNF assistant general manager Adam Martin says that the brothers had a valid reason for starting the store.  “Sadly, they had seen their mother pass away at a very young age and they felt let down by the conventional medical system. They knew that there were better options but they also knew they were hard to find and price prohibitive – especially in Calgary at the time. With the full optimism of youth, they decided they would open a store to ensure that everyone could have the wellness they deserved. Community Natural Foods originally opened its doors as a small co-operative bulk store on the second floor above a Keg restaurant. The store was primarily a meeting place for like-minded peers and quickly was the hangout in Calgary for anyone interested in alternative health.”

The brothers both had a good sense for business and a flair for entrepreneurship: Peter would go off and found New Roots Herbals in 1985.  Garry stayed in Calgary and focused on the store, and a few other things, explains Adam.  “ While still working to setup Community Natural Foods as a successful and sustainable retailer, he was working on new and exciting opportunities. He worked with Terry Willard to help launch the Wild Rose Detox, manufactured yogurt in store, became a distributor through his ownership of Christmas Natural Foods, and eventually developed Alberta Natural Products with a line of natural bar soap and a greens product. The evidence of his passion for new and exciting opportunities is still seen and felt across the organization today.”

Adam says in addition to this vertical integration, Garry also had a knack for commercial real estate and made strategic investments into this area as the business grew. “Today, Community owns 11 properties across the city of Calgary and operates in approximately half of the square footage it owns, with the other half being leased to other commercial ventures. With these investments, the company has maintained an incredible debt-to-equity ratio and has ensured that the business operates from a place of strong financial stability.”

Growth in an era of growth

As the natural foods industry continued to grow and expand at a rapid pace through the 90s and early 2000s, CNF did the same, becoming a mainstay in Calgary, the health food store all others measured up against.

 “The company has always focused on having stringent ingredient standards and the best trained staff as a way of differentiating itself from its competition,” said Adam. “The store also moved locations twice and opened a second location in the 2000. Each year, the company grew significantly and each year the profits of the company were reinvested to make the offering to the public bigger and better.”

community naturals bakeryBy the mid-2000s, Garry started to see the natural health retail landscape changing.   Competition was suddenly more prevalent, adding more SKUs and aggressively going after CNF’s long-time customers.  Garry knew he had to change how his store did business and he knew he had to find the right person to be the leader and architect to take the store in a new direction.  The person he selected for the job was his cousin, Bruce Martin.  This was not an appointment based on nepotism.  In Bruce, Garry had found a person who brought more than 30 years of senior leadership experience to the position.  Plus, they were very close, as close as brothers, spending countless hours together going back to early childhood.   Bruce was a man Garry could trust with carrying out the vision of making CNF battle-ready.  He joined the company in August 2008.

When he joined CNF, Bruce brought more than 30 years of corporate experience, with three major companies: Sears Canada (Ontario division), McKesson Pharmaceutical and Regal Greetings and Gifts.   “I was always an operation specialist, so the skills were transferable,” recalls Bruce. “My career covered retail, wholesale and manufacturing as a leader of mid-to-large sized businesses, and was involved with 23 start ups.” 

Good timing

The timing was good when he joined CNF, explained Bruce, as the industry was really maturing.  Yet, there were some major internal challenges ahead.

The first task he took on was both difficult and delicate.  It called for asking the staff to take on more of a “business attitude” in their jobs.   “Many of the people who worked here were proud of the culture they had created and they really identified with it,” explained Bruce.  “This was deep in their hearts: it defined who they were.  We had to change the thinking that  ‘business is bad.’  This was the feeling among many.  We had to convince them that our business had a higher calling. I didn’t want to crush culture, I wanted to lift it up and put a spotlight on it.  People wanted to hold onto their culture of being ‘counter-culture’ as opposed to adopting a business process.  It was a big struggle.  It took a couple of years of trust building for them to understand that they could still maintain the culture – which was important to them – but that we could add business acumen to it.”

Next on the agenda for Bruce were two things that had to be addressed immediately.  “The first thing was a general feeling that we weren’t good enough to compete with the mass guys and that we were not strong enough to compete.  It was a confidence thing.”   (Bruce says that issue has been settled, as for the past four years, CNF has been listed as one of Canada’s Top 50 Companies by CIBC and Deloitte.) 

 “That was step one.  Step two was, ‘How are we going to compete with Loblaws, Shoppers, Sobeys, etc. How do we differentiate?  We were trying to decide if we should ‘out-granola’ the big guys or actually compete on a business level.”

In the end, Bruce and the leadership team knew that to be successful, they had to take on the big guys in the business arena, so the wheels were set in motion to accomplish this. 

“We had lots of validation to move from ‘what we sold’ to ‘how we sell it.’  We went from a natural foods company to a natural foods educator and explainer.  We increased and improved staff educators, and put more people on the sales floor. We changed people’s roles and responsibilities.  This got real traction.  People now had a real and tangible experience.  When asked what they did, staff members proudly began saying, ‘Now I’m product educator.”

Bruce says it is a scientific fact: resistance to change is immense.  “We were trying to promote a marriage between the passion and dedication the staff already had, and the new element: business acumen.  Once you add the business aspect to the mix, it becomes a powerful force.  It’s like 1 + 1 = 3.  It is a real difference maker, but you need all parts.”The second thing that desperately needed addressing was ‘building bridges.”  Bruce explains: “At that point in CNF’s evolution, we didn’t have positive relationships with suppliers and the various environmental and philanthropic organizations in town.  We needed to establish that we had humility and wanted to be cooperative partners.  It took a couple of years to establish that, who we are and what we stood for.  It was a reputation-building exercise.  Going through the B Corp process was one of the steps we took to show we were a good corpo ate citizen.”

community naturals shelvingBruce accomplished a great deal working with his leadership team and staff.  He brought in new systems, more structure, discovered ways to shrink expenses and introduced a “servant leadership style,” making the focus of the store on the customer’s shopping experience.

However, after a couple of years at the helm as general manager, Bruce began to consider the next step: who would replace him?  He had a full career behind him and had to plan on someday retiring.  So he began to search for his replacement.

It was a chance phone conversation between Bruce and his son Adam in 2010 that resulted in Bruce finding a potential candidate for the job.  Adam explains:  “At the time, I was living in Vancouver working at the University of British Columbia and I loved it there.  During our conversation, I mentioned to Bruce that I was considering taking a job offer in Australia.  This caught Bruce’s attention, because he assumed I would never leave Vancouver and would never consider taking a position in Calgary.  When he realized that I was amenable to moving, Bruce said, ‘Well, if you’d be willing to move for a job, check this out.”

Bruce laid out his idea of bringing Adam onto the CNF management team to assess both his fit and potential within the organization. Soon after, Adam came to Calgary and met with a handful of CNF team members.  “It was at a time when the flag ship store was going to go through a reno,” said Adam.  “When Bruce offered me the opportunity to lead the reno, that was the hook for me to come.”  Shortly after the initial phone call, Adam was on the team.

Adam possessed many of the traits Bruce was seeking as his replacement, and matured during his time with the company.  Like Bruce, he was analytical and strategic in his approach to business.   Adam’s main strength, however, is human resources.  After graduating with a degree in commerce, he worked in HR, but found he did not enjoy working for a consulting firm.  Now, he says, he is using all the skills from his studies in his current job.  “I’m hooked for life.  This is a great opportunity to work with Bruce, who has always been my hero.”

As promised, Adam’s first task was leading the café and food service group through the reno. “We took some backroom space and converted it to selling space.  We also improved some of the efficiencies in that area.”

community naturals supplementsWith the reno complete, Adam switched over to the HR side, focusing on consulting, coaching, team building and training development.  “One of the things I focused on was growing the capacity of our existing team, and uncovering how we can work better with outside suppliers.”  To help augment this process, Adam said CNF  sent 45 managers through the Rising Stars programs over the past few years.

Adam continues to take on more of Bruce’s responsibilities.  “For the last eight months, I have been focused on the retail side.  Garry was happy to see where the business was going and he could see the potential in me.  He wanted me to be involved in managing a ‘profit centre’ within the business as part of long-term transition.”  As part of being responsible for a profit centre, Adam took on the management of all category managers (buyers) last November.

The transition is working: Bruce is now down to working three days a week.  Adam still reports to Bruce, but 90 per cent of activity and staff now report to Adam.  Bruce still oversees all support – including accounting IT and HR – as well as  CNF’s food service, re-pack facility (bulk) and original product manufacturing division, which accounts for 20 per cent of the store’s till action. 

These days, Adam is working on several exciting projects.   “We have renewed our energy on intentionally re-designing and defining our culture.  This is about solidifying what our business is, and what the culture of our business is.  We will look for people who will succeed in our business.” 

Adam is great believer in the strength of a business’s culture.  “Culture eats strategy for breakfast.  Morale, productivity, efficiency are all higher when the culture is operating at a high level.”

Another major effort is currently being directed at CNF’s suppliers.  “Last September, we held a gathering from our supplier community.  We had 100 people, repping about 60 suppliers for a day.  We explained where CNF was, including where the transition is happening.  We announced a vendor portal, so they could see our sales to consumers of their products, and can see what our inventory is with them (by location, as CNF has three stores in Calgary).  The system has auto-order trigger points, so suppliers could help us buy more or less frequently, they could do all cost updates through the portal, and they could also do product info changes.  It was one place where they could really communicate with us.”

The third major undertaking Adam and the CNF team has on the go is trying to convert the store into a true omni-channel experience. “This is when the shopper is having the same experience whether they are instore, online, picking-up or having a delivery,” explained Adam.  “We are focusing on expanding e-commerce so the full offering of the store is on-line.  Customers can order home delivery and instore pickup from online.   More sales are going to mass, so that is the major reason we want to offer more convenience.  We know we can’t match the number of mass stores, so this is our unique and different way to compete.  We need to use technology and other tools to compete.  We’re trying to couple exclusive products with popular mass brands to offer customers that true experience.”

Bruce and Adam have overseen a leading Canadian health food store make enormous changes: absorbing the skills and attitude needed to compete at the highest business level, all the while maintaining it’s valuable culture.

In April, Bruce and Adam stood on the stage in Vancouver at the CHFA awards, surrounded by some of their team, the Brock Elliott Memorial Award for Excellence in Retailing in hand.   Watching the scene, one couldn’t help but think this is truly the icing on the cake, a perfect way to lead up to the store’s 40th anniversary celebration.  And with everything that is new and coming in the near future, Community Natural Foods has positioned itself for another lengthy run as one of Canada’s most progressive natural health retailers.  •

 

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